Ask Colin

I have been watching the video that you made when you were in the U.S. You mentioned that under certain market conditions, you would be out of the market entirely. What specific trading conditions do you look for to make this decision? I know that you discussed about the advance/decline line as one of the indicator to use.

I want to be out of the market completely when everything is trending down. So, if I was trading the Japanese market just now, I would be entirely in cash.

Usually I am out by the second phase of a bear market. However, in the Australian market, we are still in a bull market in some sectors even though the disaster sectors are to be totally avoided.

I am now between 30 and 50% invested (end August 2001). I am selling ruthlessly anything that falls out of uptrend. However, I have done quite well over the last four months, by being very selective in defensive stocks.